Friday, November 28, 2008

Property Exhibitions move online – trendsetter in Global Realty

Within 24 hrs of its launch, the first ever property exhibition, launched by Maharashtra Chamber of Housing Industry (MCHI) and the leading Real Estate Networking Portal is getting huge response and success.

Owing to the increasing number of visitors visiting the MCHI exhibitions and the fact that investors for Indian Real estate are really spread across the globe, MCHI has for the first time ever, launched an ONLINE EXHIBITION that will run from 27th to 29th Nov 08, parallel to it's India Property Show at Renaissance Hotel in Dubai.

The "Online Exhibition" is a unique initiative, where visitors will be able to view "Online Stalls" of all participant developers of the India Property Show and they not only will be able to access all properties showcased during the show, but will be able to interact with all developers, one-one as they would in a real exhibition. This initiative will help investors sitting anywhere in the world to be able to access the latest projects launched by some of the premium developers of Maharashtra namely Rustomjee, Hiranandani Constructions, Kalpataru, Neelkanth developers, Mayfair Housing, Nahar Group, Bramha Builders, Parjapati Group, Pathy Housing etc and also shortlist properties based on prices, locations and other facilities.

The Online Exhibition can be visited on and it is receiving tremendous response from NRIs across the globe, who are find it a useful tool to interact with developers directly and also earn a zero percent commission on purchasing without any agents being involved.

The freshness of the concept coupled with its rich 3d graphic displays of stalls and properties is causing a sensation in the Online Realty Industry and is seen to take Real Estate Exhibitions to the next level.

Wednesday, November 19, 2008


Source : Jones Lang LaSalle Meghraj

Residential Property Markets

After witnessing tremendous growth from 2003, Pune’s residential property markets have slowed down over the last 3 to 4 quarters. Sales for most projects have dropped significantly and are presently the lowest observed over last few years. Increase in property prices, coupled with upward movement in the interest rates for housing loans, are the key reasons for drop in demand.

Developers are still holding on their prices, but there are increasing instances cash discounts during negotiations or offers of incentives such as:

• Developer paying part or all of the EMI amounts during the construction period
• Developer paying part or full amount of stamp duty charges
• Developer offering free white goods/partly furnished homes
• Developer offering four/two wheelers with every flat booking

However, such offers and schemes are predominantly observed for projects at peripheral locations, and they are primarily by Tier II/III developers and fringe players on the market.

Developers are consciously making a shift towards budget/mid segment homes with product offering between Rs. 30-35 lakh for 2 BHK apartments.

Considering the trend over the last 6 months, there are limited possibilities of demand picking up over the next two to three quarters. Customer sentiments are at their lowest, and most buyers are anticipating further reduction in property prices before making their decision. There are chances of a meltdown in property prices by about 10-15% over the next few months. The suburban areas are most likely to be affected during this downturn. Also, considering the liquidity issues, there are high chances of projects getting delayed.

Commercial Property Markets

Pune has emerged as one of the prominent destinations for IT/ITeS spaces over the last few years. About 6 IT/ITeS SEZs are in various stages of construction. These SEZs are likely to add about 10 million square feet over the next two years. Most of the anticipated supply is in the PBD, while moderate and limited supply is anticipated in the SBD and CBD respectively.

In fact, the demand for commercial spaces is primarily driven by the IT/ITeS sector. Approximately 50% of the absorption for 2008 is in IT SEZs, about 45% in STPI units and the remaining 5% in non IT/ITeS office spaces. The absorption for 2008 till date is estimated at about 3.2 million square feet.

Apart from the competing supply from within the city, Pune is also competing with cities like Bangalore, Chennai and Hyderabad. During such times, apart from real estate costs, the city level infrastructure (hard and soft) also plays an important role in attracting clients for IT/ITeS and office spaces.

Over the last few years, strong demand from IT/ITeS players as well as corporates had driven the lease rents and occupancy levels northwards. However, in light of the global financial meltdown, the demand from corporate clients has slowed down. Most companies are treading a cautious path, with a focus on cost control, and are delaying decisions on expansion plans.

Sluggish demand over the last few quarters has reflected on the lease rents for IT SEZs as well as office spaces. The prevailing rents for IT SEZs are in the range of Rs. 30-34/sq.ft. (apart from EON and Blueridge, which are quoting in the range of Rs. 38-40/sq.ft). These rental figures have witnessed a dip of about 10-15% over the last quarter. Similarly, the average asking rents for office spaces in the SBD have witnessed a drop of about 5-10% and are presently in the range of Rs. 60-75/sq.ft. pm.

The pressure on lease rents is likely to continue in the short term due to competing supply and the global financial scenario. Developers have adopted a wait-and-watch approach and have delayed plans of launching new projects.

Retail Property Markets

Pune is yet to witness its first complete mall development – a development catering to retail, leisure/entertainment and eateries under a single roof. The existing retail developments are predominantly clusters consisting of one anchor tenant and vanilla retailers.

That said, Pune is likely to witness a retail revolution in the next two to three years, with a supply of about 7 million square feet to be delivered in various pockets of the city. Three 1-million square foot+ malls are under construction, apart from numerous malls ranging between 2-5 lakh square feet. Most of this supply (over 80%) is anticipated in eastern Pune (Yerawada, Nagar Raod, Vimannagar, Kalyaninagar, Koregaon Park and Hadapsar).

Considering the general slowing down of the economy, a definite impact has been observed in transactions for spaces in malls. This is also accentuated by the wait-and-watch approach adopted by retailers and delay in moving forward with their expansion plans. Transactions have been observed at high streets, as there is demand from retailer’s for ready properties.

Considering the competition, the pressure on lease rentals is high and there are strong chances of the rents moving downwards.

Tier II/III developers with plans for malls have adopted a wait-and-watch approach.

Land Markets

Land markets have been extremely sluggish over the last two to three quarters. Transactions have drastically reduced and developers – the prominent buyer segment have in most cases stopped buying land. Key reasons being:

 Drop in demand for ongoing projects
 Pressure on prices of ongoing projects
 Liquidity crunch

Developers are offering joint venture/joint development proposals instead of outright purchase to reduce the entry cost. Liquidity crunch has forced the developer to focus on completion of existing projects rather than venture out for buying land.

Land prices are still intact in most micro markets inspite of pressure on the sale prices for constructed assets. Some marginal movement downwards is anticipated in land prices in the next few quarters.

Pune Vis-à-vis Other Markets

Pune has the distinction of having more than one economic engines of growth. Apart from the burgeoning IT / ITeS Sector, the economy is also strongly driven by manufacturing sector (auto & auto ancillaries). Education and Administration are also the other prominent economic generators for the city.

Advantages of Pune

• Proximity and excellent connectivity with Mumbai
• Pleasant weather year round
• Availability of talent pool and resource pool
• Stable political and social environment

Limitations of Pune

• Infrastructure projects like airport, road, metro rail etc need to be given a priority. Most of these projects are delayed/slowed down
• Public transport system needs improvement

The property prices in the city are still realistic and reasonable in comparison to several similar cities in the north. The average property prices for residential apartments at suburban location are in the range of about Rs. 3000-3500/sq.ft.

The growth in Pune property markets has been on the back of strong end-user demand. Speculators operating in the market at any point in time were extremely low, and this has benefited the markets as property prices have not witnessed high correction despite sluggish demand over the last few quarters. Going forward, there would be pressure on prices, but the downward movement is anticipated to be between 10-15%.

It can be definitely said that strong demand still exists in the market, and that there are still buyers at the right price.

Guidance for the Future

In a falling market, it is important for developers to be realistic in the pricing structure. As discussed earlier, there is still demand for the right price and right product. Developers should also:

• Demonstrate cost control by either adopting new technologies or improving existing processes
• Focus on customer satisfaction and ensure timely delivery
• Focus on affordability of the target consumer and right pricing of products
• Offering better quality products and differentiate from competition
• Having another look at specifications and reducing unnecessary items

Monday, November 17, 2008

First Ever "ONLINE EXHIBITION" to be launched for India Realty Expo 2008

MCHI &, join hands to launch the "FIRST EVER ONLINE EXHIBITION" for MCHI’s India Realty Expo to be held from 27th to 29th Nov 08, in Dubai

Dubai – The Oasis of the Gulf will witness MCHI‘s India Realty Expo 2008 in association with CREDAI showcasing some of the most exquisite properties in India. For many years Dubai has been home to large number of Indian expatriates. This event becomes an excellent opportunity for them to take a peep at the realty developments in India.

INDIA REALTY EXPO 2008 – DUBAI will be held on 27th, 28th & 29th Nov 2008 at the Renaissance Hotel, Diera, Dubai and the timings are 5pm – 9pm on Thursday 8th May & 11 am – 9 pm on Friday & Saturday 9th & 10th May respectively.

Inspite of the sloppy stocks and the gloomy world economy, Indian Real estate has not really seen any signs of a slowdown, owning to the increasing number of NRIs who at the very least, wish to be prepared to move back by having at home at home.
Owing to the increasing number of visitors visiting the MCHI exhibitions and the fact that investors for Indian Real estate are really spread across the globe, MCHI has for the first time ever, launched an "ONLINE EXHIBITION" that will run from 27th to 29th Nov 08, parallel to it's India Property Show at Renaissance Hotel in Dubai.

The "Online Exhibition" is a unique initiative, where visitors will be able to view "Online Stalls" of all participant developers of the India Property Show and they not only will be able to access all properties showcased during the show, but will be able to interact with all developers, one-one as they would in a real exhibition. This initiative will help investors sitting anywhere in the world to be able to access the latest projects launched by some of the premium developers of Maharashtra namely Rustomjee, Hiranandani Constructions, Kalpatru, Mahar Group, Builders etc and also shortlist properties based on prices, locations and other facilities.

This will provide a unique opportunity for those who wish to invest in India, specially Maharashtra and can’t make it physically to the exhibition, to be able to address their queries and concern through the live support offered online. All properties will be available on Maps, with exact locations plotted, making it easier for investors to identify a price versus location matrix and hence shortlist properties.

The Online Exhibition will begin from the 27th Nov 08 and end at midnight 29th Nov 08 at Investors and all real estate enthusiasts can pre-register for the event and the online exhibition at the same URL.

Lower interest rates key to affordable housing

Cityscape intelligence finds India’s real estate developers focusing on mid-income housing amid calls for liquidity & finance at lower rates

Research conducted by Cityscape intelligence ahead of next month’s Cityscape India exhibition and conference, has revealed that many of India’s top real estate developers are beginning to change their business strategy away from luxury or high-end projects towards mid-income residential developments.

However, although many developers can self-liquidate to a certain degree through attractive incentive schemes, they are lobbying the Government and the financial sector to inject much needed capital into the market and lower interest rates to benefit the developers, investors and end users.

“It has been said many times before the demand for low cost affordable housing in India is undeniable. However prices need to be realistic to begin with and mortgages affordable as well. Sentiment could be the only stumbling block, which if removed could energise India’s entire real estate sector,” said Graham Wood, Exhibition Director, Cityscape India.

To underscore the importance of this property segment, the Honourable Minister for Housing and Urban Poverty Alleviation, Kumari Selja, will address domestic and international delegates during the opening of Cityscape India which is due to take place at the Bombay Exhibition Centre on 8-10 December 2008.

Her speech entitled ‘Affordable Housing For All In India’ will outline the initiatives to develop residential property, not only for India’s burgeoning middle class, which is now estimated at 325 million people, but also for India’s lower class, which still represents approximately 70% of India’s 1.2 billion population.

“This could be news that some of India’s investors and developers have been waiting for. One thing is certain, the real estate industry will be given an insight into the Government’s mindset on low cost housing initiatives and equally important a platform to present their own challenges direct to the minister,” added Wood.

Cityscape India is an annual international networking exhibition and conference focusing on commercial architecture, property investment and development and attended by the most significant investors, developers, architects and consultants.

The event was launched in 2007 to provide the country's real estate sector, with a networking platform where domestic developers can source international investment contacts. It is also a platform where international developers can meet Indian investors. This year, Cityscape India is set to welcome more than 8,000 participants from around the world.

Another highlight this year will be two parallel conferences, ‘Infrastructure Finance & Investment’ and ’Retail City Summit Day’. Notable participants include the Trump Organisation of the United States, Al Futtaim Group Real Estate, UAE, Merrill Lynch, India and Ansal API Group, India.

Donald Trump Junior, Executive Vice President of Development and Acquisitions for the Trump Organisation, spoke at last year's Cityscape India, and is set to return this year sending a clear message of intent to India’s property market.

The Cityscape India 2008 Real Estate Awards will also honour leading real estate professionals and companies for their outstanding contribution to the industry.

Platinum sponsors of Cityscape India 2008 are Limitless a Dubai World company and Soundlines, a diversified company with offices in UAE, Saudi Arabia, Qatar, India, Nepal and Bangladesh. Leading real estate and investment company Tanmiyat are the Gold sponsors.


Asset ownership on the balance sheet likely to come in vogue again

Mumbai, November 16, 2008 – While the office space leasing market in Mumbai was visibly cooling off in 2008, the Standard Chartered Bank’s purchase in an upcoming building in the financial district of Bandra Kurla Complex has opened a new area for transactions. Asset ownership by corporate entities may come back in style, as the opportunities to invest within businesses themselves offer lesser and reducing returns.

The purchase by SCB in Mumbai’s BKC last week also indicates that after a protracted second-guessing of potential locations for financial institutions, the centrally located Bandra-Kurla Complex is finally emerging as the preferred location.

“The outright purchase of approximately 250,000 square feet of ultra-prime commercial space for a staggering transaction amount of over Rs. 700 crore indicates a definitive preference for the location by the bank,” states Aniruddh Wahal, who concluded this transaction in his capacity as Head of Corporate Capital Markets, Jones Lang LaSalle Meghraj. “Considering that Standard Chartered is a leading foreign bank, the trend will doubtlessly catalyze renewed interest by other key occupiers in Mumbai.”

Earlier this year, Citibank decided retain its corporate presence in BKC, and looking at the number of new confirmed and potential occupants - which include UOB, SBI Cap, Morgan Stanley, UBS, Daiwa, Nomura, Blue River and ANZ Cap - it is apparent that more transactional banking business will be conducted out of BKC. This was not the case till now, and also a major shortcoming of the location.

Further, Aniruddh emphasizes, “Mumbai continues to value development quality and high technology enablement over location or developer brand names alone. This transaction underscores this fact, considering that the developer is not an established brand in the office market yet.

“This transaction links closely to the economic changes taking place globally,” says Aniruddh. “Asset ownership on the balance sheet is likely to come in vogue again, pushed by reducing returns on most business and expansions, and pulled by cooling real estate prices. In Mumbai, a preference of purchase over lease of assets is further going to be aided by the fact that almost 90% of asset value goes to land (appreciating) while only 10% is attributable to construction cost of the building (a depreciating number).”

“Corporate entities have, over the past decade and half, been cautious about owning assets, given the demand made on capital to feed the tremendous pace of business growth in this era. As growth comes to an end, asset ownership is likely to be a good instrument for parking liquidity in a inflationary, depreciating rupee economy.”

Monday, November 10, 2008


Shubhranshu Pani, Managing Director – Retail, Jones Lang LaSalle Meghraj

A few questions need to be answered before one starts to build a mall. It is imperative to understand and answer these if one hopes to launch a successful, long-running shopping center.

Question 1. Why do you want to build a mall?

The mother of all questions - WHY A MALL? There can be various answers to this question - and to be fair, all of them could be correct. These answers point to the motive for building a shopping center, which would suggest the way forward:

1) Malls have been offering very good returns - Agreed. The first few shopping centers in the country have yielded excellent returns, giving the industry a model to yield good returns. Low land costs and high rentals used to offer good returns to any investor. Should this be the primary motive, there could be two possible ways to move forward.

A - Sell the mall as soon as it is leased, because a sold model offers quicker returns and doesn’t make you hold the property for a long term

B. Build a mall on strong fundamentals after answering all the questions below. This would mean develop a shopping center which can stand the test of time and can give healthy returns to all the key stakeholders.

2) The project I’m involved with (large, mixed use, 100 acres+) needs a component of retail for convenience to the inhabitants - Great. To add a dash of retail to a large mixed use development is a great idea, though the components of this retail may vary according to the needs of the consumer. However, it is not always necessary to develop a large shopping center when you are developing a large township. A mid sized convenio-retail format can also do the magic. Understanding the needs and fulfilling them is the key.

3) This neighborhood has great potential, with families who are longing for a good shopping/entertainment outlet - EXCELLENT. If the fundamentals suggest that the neighborhood has the potential to sustain a shopping center and there is a market gap which can be exploited, it offers the best possible rationale to develop a shopping center. The fundamental success factor for any shopping center is the catchment and the customer base. If they keep coming back for more, you have success.

Question 2. Who is going to shop here?

As already discussed, once the objective of developing the center is ascertained, it is important to understand the end customer. Indeed - who will come to shop here? Who they are? What are their income levels? What do they like to shop for? These are the basic questions that need to be answered. A shopping center is not built for the developer or the investor or the retailer, but for the customer who will come and shop there. Understanding them from a socio-economic perspective and expense pattern is the key.

Question 3. What are the alternatives this consumer has?

Understanding the existing markets and where people shop is critical. If one is to develop a new market, it should get the buy-in from the customers. Thus, it is important to know where they like to shop and what do they like to shop for. Understanding the current and future competition in the marketplace/micro market is extremely important.

Question 4. What is the market gap and where is it?

Going forward from the previous two questions, one has to ascertain the gaps in the market. What does this consumer need and want, and what is available to him in the existing markets? What are the products/categories, for which the catchment has to reach beyond their regular marketplace? What is the upcoming competition offering, and what are the gaps that still remain in the market? These questions give you a clear understanding of the product mix, which is absolutely essential for developing a center that will witness immediate buy-in from customers.

It also helps us answer the question of how large a shopping center should be. Unfortunately, we often decide on the size of the shopping center based on the size of the land parcel and the FSI/ FAR available on the land. This route may or may not give us an accurate assessment of the right size for a shopping center that a neighborhood requires.

Question 5. Why will the consumer come to my mall? How will I differentiate this project from other?

A very pertinent question. When there are existing marketplaces that the consumers are already used to and comfortable with available, why would they come to a new project? The aforesaid three questions should give the fundamental building blocks for this answer. If one knows the consumer and what they need and desire, and one knows what is available to them comfortably and what is not, it is easy for to identify the tenants and trade categories that will differentiate this center from the others. If the customer comes to the center for one of these needs, it is relatively simple for to make them come back for other things as well, providing that one has covered the fundamentals of the customer’s needs and desires.

The differentiation for a center can not only be from the perspective of the mix, but could also be on a conceptual level, where a center is planned differently and offers a similar mix in a different format/environment that customers appreciate. However, the answer to this can only come post operations, though a good understanding of the customers can give a fair idea in advance.

Question 6. Will this project be viable for retailers?

If one were to develop this center and be able to differentiate it from competition, bringing in customers, how much business will retailers be able to do - and how much can they afford to pay to the developer for the real estate? This is a million dollar question. We often decide the rentals for a particular shopping center before we do the math on how much revenue the retailer can generate from it. The reverse calculation makes more sense, since for the retailer, real estate is large cost and has a direct bearing on how much he can sell.

Most retailers are more than happy to pay a fixed percentage of sales as real estate cost, since it is that percentage that matters to their bottom lines. Even if the effective rental is higher than the current market rental, it is not an issue for them, as has been experienced by Prestige Group with their Forum Mall in Bangalore. If the rentals constitute a very high percentage of their sales, the viability of the store drops, and retailer may either walk out of the center or try to renegotiate with the developer. Either ways, the one who is affected the most is the developer, who has to bear the brunt of losing retailers or renegotiating to lower rentals.

Question 7. With the given answers, is this project viable for me?

Once we know what retailers can pay (not in terms of a generic number, but calculated separately for every trade category) the developer can go ahead and answer the biggest question - if this is the size of the development, this the mix, this what the retailers can pay and this is, this ho one can differentiate the project and this the project cost - is this project viable?

Project viability can be evaluated at multiple levels and could be viewed in short-term and long-term. However, the viability and profitability levels vary between developers, and each has a different threshold.

Question 8. How will I fund this project?

Project viability analysis gives us the basic financials on raising capital for building the center. It is important to be as transparent and realistic as one can while pursuing financial institutions. The era of unrealistic valuations and financials is over, and the recent financial turmoil has made institutions more careful about how and whom they fund. An unrealistic expectation might not find many takers and can put a project at financial risk.

Evaluating different models for project financing is important. Today, we can avail of equity from both local as well as foreign institutions and private HNIs. Preferred equity could be raised in the form of mezzanine capital from various foreign institutional investors. Though there has been a crunch in the debt markets, with further stringent measures being deployed by financial institutions, this situation will not prevail for long and will eventually become easier.

Question 9. What are the fundamentals of design that need to be looked into?

Design is a very important part of the process. If there is haste or lags in the design, it can become almost impossible to rectify, and possibly very expensive. It is important for developers to look into the design of the shopping center very closely. The sequence of events, which are often mixed up, are:

  1. Creating a concept (not architectural, but conceptual)
  2. Creating a trade mix (a tenancy mix could be decided later, except for key anchors)
  3. Appointment of an appropriate architect – it is important to evaluate various architects before selecting one, primarily because of their past experience. There are a number of architects who are working in India today, but the relevance of their experience is important.
  4. Concept design - it is not important that every shopping center have a huge glass façade or is 100% air-conditioned, or that it be enclosed. Based on the concept, intent and catchment, these could vary.
  5. Schematic design
  6. Detailed design, at which stage it is important to look at the softer issues of design as well. The softer issues would be palate, colours, rest rooms, waiting areas, seating, mother’s room, pantries, driver’s lounge, mall management office, help desks, etc. These soft issues are hygiene factors in any development, and if missed could have a negative impact on the customers’ experience. It is very important to understand that once the design falters, it is very difficult and expensive to rectify it. Spending time on planning is not time wasted, but time well invested.

Question 10. How do I ensure this project has longevity?

While one is busy planning the overall development and ensuring capital procurement and construction schedules, it is important to find answers to this very important question. Given that one can build in a good mix and plan the project well, what can one do to ensure that the project is successful in the long run? The answer is effective mall management. Mall management involves many functions, including housekeeping, parking management, tenant coordination, marketing management, regular improvements and upliftment of the center. Creating a good center is a good first step, but only effective mall management can ensure sustained customer flow into the project.

If these 10 questions are effectively answered and outputs implemented, we would definitely have a number of successful shopping centers sprouting up across the country.

Thursday, November 6, 2008


The economic slowdown has combined with the real estate market’s inevitable efforts to assume rationality. For Indian residential space developers, the dream run is over – but for the sector’s end-users, an Era of Reckoning is at hand. Properties that would forever have stayed out of the reach of India’s less privileged middle-class denizens are about to be put on the table.

Yes, it is a buyer’s market now. Residential rates are crashing across the country. Overheated pockets in our metros and the more prominent Tier II cities are now tasting humble pie. Is there any scope at all left for residential property investors?

The answer is a simple ‘yes’. There will be no more short-term killings in Indian real estate, but certain areas in the very cities that most now shake their heads over retain their mid-to-long term potential. While other areas in these cities are headed for correction, these locations will hold their own and even grow. The Indian residential real estate story is writing its sequel – and this time, it features real players, realistic settings and a believable storyline...

Anuj Puri

Chairman & Country Head, Jones Lang LaSalle Meghraj


Mumbai has witnessed some of the highest selling prices in the residential market till the beginning of this year. Clearly, those prices were not sustainable, since buyers for super luxury homes are shrinking fast. One of the focal areas was central Mumbai (specifically Lower Parel and Worli) which witnessed the highest price escalations. These now faces the challenges of the slowdown.

The current slowdown has curtailed the investor segment in the residential property market. The driver for what demand exists now are real end-users. In Mumbai, there is no dearth of those desperate to find homes within an affordable range - affordable housing is therefore now the silver lining on the dark cloud of today’s slowdown.

Mumbai has three different directions in which growth can still be observed. Appreciation is not a factor currently, but these are the areas that will sustain their prices – while other areas in Mumbai will correct.

1. The extended western suburbs - the Vasai-Virar sub-region. This region is known for budget housing.

  • Drivers:

    1. Economic drivers such as the MP SEZ by DHL, BIO tech SEZ by Mahindra and IT SEZ
    2. Connectivity is going to increase by introduction of additional suburban trains from next year

Prices are in the range of Rs. 2500-3500/sq.ft

2. The area adjoining Panvel

  • Drivers:

    1. This region is benefiting significantly from trunk infrastructure enhancements such as the upcoming new airport, the Trans-Harbor Link, a railway terminus, mono rail etc.
    2. Positive impact from the upcoming Mega SEZs by Reliance and others.
    3. The expansion of JNPT.

Many developers have already initiated large township projects in this region. The price range are Rs. 3000-3800/sq.ft.

3. Bandra-Khar area

Prime property hunters are still focused on this area.

  • Drivers:

    1. It will witness increased connectivity by the Bandra-Worli sea-link, the proposed Metro Line 2 and also the upcoming Santacruz-Chembur Link road.
    2. This region is always a preferred destination for prime property seekers because of its elite profile, and because of the high level of available shopping, healthcare, education and recreation facilities. Developers there are offering products in redevelopment schemes.

The prices range from Rs. 18000–25000/sq.ft.


Currently, there is a definite slowdown in growth in the suburban residential market. Construction has stopped on new projects, resulting in a stabilization of rates for ready-possession flats. This scenario also reflects in Delhi, where the rates for good properties rates are now stable.

However, the areas around the 150-meter road that will eventually connect Gurgaon to Dwarka – specifically, Sectors 103-111 – have significant growth potential.

  • Drivers:

  1. A lot of developments will come up in this area, and one can expect a year-on-year appreciation of at least 5-7% even now.
  2. The area is currently under-developed – however, when residential projects there reach completion in 2-3 years, the appreciation will be between 30-35%.
  3. A lot of this depends on the ability of developers to raise enough cash to complete their projects. Those who do not have the requisite finances will miss out on an extremely lucrative opportunity.

The current rates in this belt range between Rs. 2200-2300/sq.ft. In Dwarka, the rates are between Rs. 4000-4500/sq.ft and in the further locations of Gurgaon between Rs. 3500-4000/sq.ft.


Chennai’s residential real estate scenario is considerably depressed at the current time. Developers who have projects along the once booming IT corridor are all set to reduce their rates by as much as 20%.

However, the Mogappair-Porur composite region continues to hold mid-to-long term investment potential.

  • Drivers:

  1. This overall location is very close to the prime residential catchment of Anand Nagar and also to Chennai railway station and the bus terminus.
  2. The fact that it is not near the IT corridor also increases its potential.
  3. The rates there are competitive at Rs. 2800-3000/sq.ft.

The expected appreciation for residential properties here is between 20-30% long term).


Bangalore is surely feeling the brunt of the IT slowdown. However, established suburban areas like Koramangala, Bannerghatta, Outer Ring Road and Bellari Road continue to be good investment destinations. As in the case of Mumbai, appreciation is not a focal point in the current scenario - these are the areas that will sustain their prices, while other will correct.


  • Drivers:

  1. No scope for fresh developments
  2. Close to Electronics City
  3. Residential demand is high

Rates are between Rs. 7000-8000/sq.ft.

Bannerghatta, Outer Ring Road and Bellari Road

  • Drivers:

  1. Close to IT hub
  2. Outer Ring Road is close to Whitefield and is a commercial area.
  3. New developments are coming up on Bellari Road, which is also close to the Devenhalli airport.

Rates – Rs. 3500 – 5500/sq.ft.

Appreciation potential between 5-8% short term. Long term 10-15%.


With Talegaon not picking up in the anticipated manner, Pune’s new growth corridor now encompasses Kharadi and Nagar Road. This can be safely considered as the most lucrative real estate investment zone for 2009-2010.

  • Drivers:

1) Eon IT Park – 4 million square feet of prime IT space in the last stages of completion

2) Other IT SEZs as well as commercial ventures also on the anvil

3) Proximity to revamped airport

4) Improved connectivity, largely via the opening of the VIP Road connecting Viman Nagar to the airport

5) Imminent arrival of 5-star hotels such as JW Marriott, Grand Hyatt and Leela

6) Reasonably low entry costs:

Rates – Rs. 2700-3500/sq.ft


Hyderabad continues to hold its own in the current slowdown scenario, though significant growth has now been restricted to certain specific areas.

Residential real estate investment growth potential in Hyderabad will center primarily around Gachibowli and Tellapur.

  • Drivers:

1) Proximity to the financial district, which is where the highest growth of IT and other commercial projects is happening

2) Could become another CBD over the next ten years

3) Outer Ring Road (Phase 1 in advanced stage, phase 2 scheduled after six months) in the vicinity will reduce commuting time of residents to key workplace locations

Rs. 3000-3500/sq.ft.

Appreciation in these areas will be about 5% in 2009 and might increase in further years.

Monday, November 3, 2008

India gets realty check from Gulf investors

3rd Nov 2008 - Gulf property majors shun India’s
economic indicators and dig-in for the long haul - India’s real estate market estimated to grow to $60 billion by 2010

Despite the current economic downturn, India’s real estate is said to be worth about $16 billion and is estimated to post annual growth rate of 30 per cent to reach $60 billion by 2010 according to research outfit ‘Çityscape Intelligence’.

As a consequence a large contingent of regional real estate investors and developers are poised to descend on Cityscape India to further their long term ambitions in the sub-continent.

Graham Wood, Exhibition Director for Cityscape India said, “The internal demand for commercial and residential real estate in India is undeniable. The investment climate may be difficult but developers will benefit from lower land prices, lower material and labour costs. Providing that the finance is in place, many developments may be approaching completion after the downturn has bottomed-out.”

Saeed Ahmed Saeed, CEO of LimitlessDubai-based Limitless is confident about the long term prospects of India’s real estate sector. "India is currently facing a shortage of some 21 million homes, and more than 300 million people are expected to migrate to urban areas over the next 20 years. At Cityscape India, we will showcase 11 global projects including Bidadi -- our proposed 4,000 hectare mixed-use development near Bangalore -- which will house around 750,000 people," said Saeed Ahmed Saeed, CEO of Limitless.

In addition Mohamed Binbrek, Group Chief Executive Officer of Dubai Properties recently confirmed that the company hopes to expand its development projects into India. He went to say that whether the scheme would be residential, commercial or mixed-use, the project would be funded by the firm itself.

Dubai-based real estate developer Majid Al Futtaim (MAL) has announced it is investigating India ‘a market to be in’ as a possible region for investment and development. Younis Al Mulla, MAL business development officer, said that the firm was looking to enter a joint venture with a local firm to help it build a mixture of residential and commercial real estate in the country.

The investment arm of Ras al-Khaimah also plans a $5 billion business centre at Hyderabad. Ras Al Khaimah Investment Authority (RAKIA), which manages funds of the emirate, part of the United Arab Emirates, said recently it had signed an initial agreement with Andra Pradesh Industrial Infrastructure Corp to set up Hyderabad Economic City, which will offer financial and healthcare services. Indeed demand for affordable housing is an issue that Kumari Selja Minister of State (Independent Charge) for Ministry of Housing and Urban Poverty Alleviation will address during the opening of the Cityscape India Conference.

“With 70% of India’s 1.2 billion people categorized as lower class, the demand for affordable housing is immense and potentially the long term returns for investors and developers is colossal,” said Wood.

This year’s Cityscape India, which is due to take place at the Bombay Exhibition Centre on 8-10 December 2008 will host major real estate players such as RAK properties, Dubai Investments, Tanmiyat, Gulf Finance House and Limitless.

In total Cityscape India is set to welcome more than 7,000 participants from around the world. "In addition, leveraging its relationships in the global investment market place, Cityscape will reach out to over 350,000 senior decision makers seeking to invest in one of the world’s fastest growing economies," added Wood.

Another highlight this year will be two parallel conferences, ‘Infrastructure Finance & Investment’ and ’Retail City Summit Day’. Notable participants include the Trump Organisation of the United States, Al Futtaim Group Real Estate, UAE, Merrill Lynch, India and Ansal API Group, India.

Platinum sponsors of Cityscape India 2008 are Limitless a Dubai World company and Soundlines, a diversified company with offices in UAE, Saudi Arabia, Qatar, India, Nepal and Bangladesh. Leading real estate and investment company Tanmiyat are the Gold sponsors.